Stocks posted sharp losses Monday as investors reacted to the latest developments in a tit-for-tat trade dispute between the U.S. and China.

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The Dow Jones Industrial Average fell 328.09 points, or 1.33%, to 24,252.80. The S&P 500 slipped 37.81 points, or 1.37%, to 2,717.07. The Nasdaq Composite was down 160.81 points, or 2.09%, at 7,532.01.

The market came under pressure following news reports that President Donald Trump was preparing a plan that would curb technology exports to China and bar many Chinese companies from investing in U.S. tech firms. The tech-heavy Nasdaq posted its worst day in three months.

In a tweet, U.S. Treasury Secretary Steven Mnuchin disputed the reports, calling them “false, fake news.” Mnuchin said the proposed investment restrictions would apply to “all countries,” not just China, trying to steal U.S. technology.

Wall Street has grown concerned that the U.S. and China will enter a full-blown trade war. The Trump administration recently threatened to slap China with new tariffs on $200 billion worth of goods, saying if Beijing retaliates, the amount could double. Trade tensions have weighed on U.S. stocks, particularly industrial names like Boeing and other companies that would see a negative impact from international tariffs.

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Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, said markets are only beginning to price in the possibility of a trade war. A true trade war that drives the U.S. into a recession would lead to a 20% drop or more in stock prices, he explained.

“Instead, what we are experiencing is how the Trump administration is applying pressure to the Chinese so that they will eventually agree to some type of compromise,” Zaccarelli said, adding that the president’s tariff threats are “part of the negotiation.”

In economic data, traders digested a better-than-expected measure of new home sales. Sales jumped 6.7% in May from April, with 689,000 homes sold versus 665,000 expected. The median sales price was $313,000, down 3.3% versus May 2017.

U.S. crude was slightly lower Monday following Friday's steep rally, which followed the Organization of the Petroleum Exporting Countries’ (OPEC) decision to increase oil production by an amount that isn’t expected to impact the market’s tight supply-demand balance. Oil settled 50 cents lower, or 0.7%, at $68.08 a barrel.